ASX in the slow lane with big banks the only bright spot

Welcome to your five-minute recap of the trading day.

The numbers

The Australian sharemarket was flat for much of Monday and managed to close marginally higher, despite building materials business James Hardie and mortgage insurer Helia dragging on the ASX.

The S&P/ASX 200 was just 5.7 points up at close, at 7936.90 points, with seven of 11 industry sectors in the red and the big banks the only bright spot in a sedate session. Local investors remain in a cautious mood after a tumultuous past month for markets, as they brace for more details on US tariffs and the upcoming federal budget.

James Hardie shares tumbled after it announced a blockbuster deal on Monday morning. Credit: Bloomberg

The Australian dollar is buying US62.75¢, trading on par with Friday afternoon’s US62.89¢ after a Monday morning rebound lost steam.

The lifters

The big four banks finished the day strongly, led by Commonwealth Bank’s 1.4 per cent gain; Westpac has added 1.7 per cent, NAB was 2.2 per cent higher and ANZ rose by 0.8 per cent.

Consumer discretionary was the best performing sector, buoyed by a 1.7 per cent increase from conglomerate Wesfarmers. Aristocrat Leisure (up 1.8 per cent) and retailer Harvey Norman (up 1.6 per cent) also finished in the green.

Meanwhile, the miners were mixed. BHP lost 0.6 per cent, but Rio Tinto was 0.4 per cent higher and Fortescue added 3.2 per cent.

The laggards

Shares in James Hardie ended the trading day 14.5 per cent lower after the building materials company agreed to a blockbuster deal for AZEK, a US maker of outdoor living products.

The deal represents a total per share value of $US56.88, based on Friday’s closing price of $46.80 a share of James Hardie’s ASX-listed shares, which is a 26 per cent premium to AZEK’s volume-weighted average price over the previous month, the statement said.

Mortgage insurance business Helia also endured a tough session, with its shares tanking 25.6 per cent after cornerstone customer CBA said it was in talks with a rival insurance firm.

Helia got almost 44 per cent of its premium revenue from its contract with CBA last year – this is now at risk. Helia said it was “disappointed” after the two companies had worked together for the past 50 years.

Former Nike executive Ashley Reade has been appointed to lead surfing sportswear brand Rip Curl, one of three brands owned by KMD Brands, which has been battling declining sales and a dwindling share price for the past three years.

Relative calm returned to Wall Street last week.Credit: Bloomberg

Reade, who spent the past 20 years as vice president and general manager of Nike’s Asia Pacific business, said Rip Curl was the “ultimate surfing company”. “Joining this iconic brand as CEO is a career-defining moment,” he said. KMD Brands’ share price finished flat.

The lowdown

The Australian federal budget will be announced on Tuesday night against a “pretty tough backdrop”, according to market analyst at eToro, Josh Gilbert.

“It’s an election year, after all, and after back-to-back surpluses, the expectation is this year’s numbers will come in as a deficit ... [this] will likely hurt ASX backers in the days following Tuesday’s announcements,” Gilbert says.

“For crypto investors, however, last Friday’s announcement that Labor intends to introduce better regulation for the crypto industry could stoke optimism that we are heading towards greater institutional support within Australia. Depending on how that factors into a broader vision for crypto in the budget, if any, means we may see longer-term positivity as a result.”

US stocks have been losing ground for weeks over uncertainty about the direction of the US economy. A trade war between the US and its key trading partners threatens to worsen inflation and hurt both consumers and businesses. Inflation remains stubbornly above the US Federal Reserve’s goal of 2 per cent, and tariffs could hurt the central bank’s efforts to ease the rate of inflation.

Bloomberg reported on Monday morning that Donald Trump’s planned “reciprocal tariffs” expected to be announced on April 2 were set to be more focused than the wider barrage he has occasionally threatened, officials familiar with the matter said.

Trump will announce widespread reciprocal tariffs on nations or blocs but is set to exclude some, and – as of now – the administration is not planning separate, sectoral-specific tariffs to be unveiled at the same event, as Trump had once teased, officials said.

In the electric vehicle market, Trump’s tariffs have made way for a new key international competitor, says Josh Gilbert.

“If you’re on the roads in Australia, you’ve probably noticed an increase in BYD vehicles over the last couple of years. Long regarded as a lesser rival to Tesla, significant shifts across markets – and a growing negative public sentiment towards Tesla – has laid the groundwork for BYD to turn its latest innovation into a breakthrough moment,” Gilbert says.

“With US tariffs throwing plenty of uncertainty into the market, investors will be looking beyond Wall Street for more diversification in their portfolios. China’s trade war resilience makes a government-supported EV manufacturer with a history of rising demand and impressive tech innovation a compelling choice for many investors.”

On Friday, Wall Street shook off a weak start and closed slightly higher, snapping a four-week losing streak. The S&P 500 edged up 0.1 per cent. The index finished with a 0.5 per cent gain for the week. It’s still down 4.8 per cent this month so far.

The Dow Jones eked out a 0.1 per cent gain, while the Nasdaq composite rose 0.5 per cent.

Tweet of the day

Quote of the day

“Ghost ads – listings for jobs that don’t actually exist – are a nuisance for jobseekers. They linger for months, dupe eager applicants to pursue fake jobs, and could be damaging our economic future. As the ghost ads become more common, experts warn that their harm is spreading beyond individuals.”

That’s Chris Zappone’s analysis of “ghost jobs” in Australia. You can read more of his piece here.

with AAP, AP, Bloomberg

The Market Recap newsletter is a wrap of the day’s trading. Get it each weekday afternoon.